UNITED STATES, — It was a rough Monday on Wall Street in New York.
The Dow Jones dropped more than a thousand points on what was the worst day for Wall Street in nearly two years.
“The Dow Jones was down about 2.6% -- over 1,000 points," said Ray Perryman, President of The Perryman Group -- an economic research company. "The S&P, which is a broader index, was down 3.0%. And the NASDAQ, which is more of a tech index, was down 3.4%.”
While the U.S. did see job growth in the latest jobs report, growth at a lower rate than expected was the primary reason for the stock market dip, says Perryman.
“The federal reserve tries to balance inflation and unemployment, and basically what we saw was with the last jobs report, they’re going to shift very quickly to managing economic growth which means lowering interest rates, which the market’s been wanting," Perryman said. "But, because that signal came fairly abruptly, the market somewhat overreacted."
Perryman believes inflation being down also helps the federal reserve have the ability to focus on economic growth and lower interest rates.
“I think they’re going to go down, probably go down multiple times this year," Perryman said. "I think what happened in the stock market yesterday is just an indication that the world now recognizes that indeed it’s time to take that joint mandate of lower inflation and full employment, and shift it more toward full employment.”
Despite the concerns of some, Perryman views Monday’s Wall Street woes as a temporary panic.
“I think the rest of this year will be slower growth than what we [saw in] the early part of the year and certainly what we saw the previous years, but I don’t see it turning into any kind of significant recession or anything of that nature," Perryman said. "But, I think we’ll see a little bit slower growth, which is something we’ve been anticipating for a while, which also gives the federal reserve more cushion to bring down interest rates as well and hopefully begin to reverse that trend."
U.S. stocks did bounce back Tuesday morning.